Congress is considering a simplified process for forgiveness of Paycheck Protection Program loans, especially smaller loans, the CEO of the S.C. Bankers Association said.
Across South Carolina, 63,000 businesses received federally backed loans under a quickly passed relief package that made low-interest loans available for businesses to keep employees safely at home but still on a company’s payroll.
Most of those loans were for $150,000 or less, but many were for more, up to $10 million, an analysis by the Business Journal found. The Paycheck Protection Program had a deadline for June 30, but that has since been extended to Aug. 8, the Small Business Administration said.
Fred Green, president and CEO of the S.C. Bankers Association, said Congress is considering a measure that would make it easier for loans to be forgiven, but a lot depends on how the law is written and what is passed. One version would allow loans under $150,000 to be forgiven with a simplified, one-page document, he said.
“The importance of that it goes back to what the program was intended for,” Green said. “It says that for all PPP loans $150,000 and less, the form and the process for forgiveness is basically a simple one-page attestation.”
Green said that type of legislation would help small, struggling businesses tremendously, as well as the crush of loans the SBA has been handling through the pandemic.
“The bank cannot make that decision on making the loan nor on forgiveness,” Green said. “Early on during the application process there was a huge demand that overtaxed the system and had huge delays. The reason this bill is so important is without that bill it’s going to be a very similar experience on the back end.”
The Paycheck Protection Small Business Forgiveness Act, S.4117, has been read twice and referred to the Senate Committee on Small Business and Entrepreneurship. Green said that the S.C. Bankers Association and other trade organizations and chambers of commerce were supporting the legislation.
“If the bill is successful, not only does it allow small-business owners to focus on their businesses, it also allows the banking industry to process these applications more quick, and it also allows the SBA and their staff to review them and make decisions much more quickly,” he said.
See Monday’s Charleston Regional Business Journal for a special report on businesses receiving Paycheck Protection Program loans in South Carolina.